Four years since Covid-19 lockdown curbs forced Burger & Lobster to close its restaurants, the purveyor of gourmet patties and crustacean rolls is still battling with its insurance company to recover some of the resulting losses.
Alongside more than 20 other businesses including the owners of Hawksmoor steakhouses and Newcastle Falcons rugby club, the chain has brought a claim against Allianz in London’s High Court after the insurer declined to pay out on its business interruption policy, a type of cover designed to compensate for lost revenues.
The case is one of dozens being fought between insurers and UK policyholders from national hotel chains to local hairdressers, breweries and tattoo parlours angered at how their claims have been handled.
Data from litigation analysis group Solomonic shows there are more than 100 unresolved insurance cases in the High Court related to Covid-19. The total combined value of the sums being sought is about £735mn, according to Solomonic.
![A Burger & Lobster restaurant in the City of London](https://www.businessfast.co.uk/wp-content/uploads/2024/05/Insurance-battles-over-UK-Covid-lockdowns-rage-on-in-courts.jpg)
The disputes are dragging on three years after a landmark judgment from the Supreme Court that found in favour of thousands of other businesses, and more than a year after the World Health Organization declared the Covid-19 emergency over.
While the “test case” — brought by the Financial Conduct Authority, the regulator, on the policyholders’ behalf — related only to particular types of policy wordings, the ruling was expected at the time to lead to swifter claims payment more broadly.
It prompted the FCA to call on insurance chief executives to deal with outstanding disputes in the “cheapest and quickest way possible”.
That simply has not happened, at least in the case of Burger & Lobster, said Olivier Mougin, chief financial officer of the restaurant chain, which is seeking about £4.5mn from Allianz.
Protecting clients in such circumstances should be at “the core” of insurers’ business, he said. Instead, Allianz had taken “the view of protecting their own business first”.
Lee Watts, director of technical claims in Allianz’s UK commercial business, said the insurer understood businesses’ frustration dealing with the impact of Covid. But he added it was “confident that we have applied cover correctly and in alignment with previous legal precedents, including the Supreme Court judgment in the FCA test case”.
Allianz is not alone in fighting such legal battles. Many of the world’s largest insurers, including Aviva, Axa, QBE and Zurich, are also party to the live Covid-related cases, according to the Solomonic data.
![A Hawksmoor restaurant in London’s Spitalfields](https://www.businessfast.co.uk/wp-content/uploads/2024/05/1715621030_270_Insurance-battles-over-UK-Covid-lockdowns-rage-on-in-courts.jpg)
One big category of continuing disputes relates to claims under “denial of access” clauses, such as Burger & Lobster’s. In these cases, the insurance was triggered if access to the premises was hindered.
Such wordings were originally devised to protect against more traditional risks such as bomb threats. Insurers have argued they do not apply to the pandemic.
The Allianz policy specified that it would cover losses if access was denied by a “policing authority”, which the insurer argued did not extend to central government imposing Covid lockdowns.
A second category of dispute relates to “at the premises” policy wordings, which covered businesses for an outbreak of disease at their establishment.
![A man wearing a face mask walks past a PizzaExpress restaurant in London at the height of the pandemic](https://www.businessfast.co.uk/wp-content/uploads/2024/05/1715621030_570_Insurance-battles-over-UK-Covid-lockdowns-rage-on-in-courts.jpg)
Policyholders including PizzaExpress and London’s Excel event centre won last year in the High Court after it ruled their “at the premises” policies should cover Covid losses. The insurers appealed and the Court of Appeal is due to hear the case next month, though two of the insurers, CNA and RSA, have since settled.
Roger Franklin, head of insurance litigation at law firm Edwin Coe, said that while insurers were under guidance from the FCA not to “litigate everything to the nth degree”, a lot were taking to court “every point under the sun”.
The Association of British Insurers trade body declined to comment, although lawyers who act for insurers dispute Franklin’s characterisation.
One leading insurance barrister said insurers had been making “perfectly respectable” arguments in denying claims, even if they ultimately lost in court.
“Insurance companies probably have a duty to their members and shareholders to resist liability if it’s reasonable to do so,” the barrister said.
The FCA said in a statement: “We expect firms to treat customers fairly and handle any outstanding business interruption claims promptly.”
Insurers had paid £1.7bn on pandemic-related claims as of March last year, according to the latest regulatory figures.
While that “sounds like a lot, it’s not really when you look at the size of the losses that have been suffered”, said Richard Leedham, partner at law firm Mishcon de Reya.
Not all judgments have gone against the insurers, however. The High Court found in favour of Allianz on the “policing authority” point in a related case in January — a setback for the Burger & Lobster’s claim, whose wording was the same. That decision is being appealed by the claimants in that case.
Other companies fighting Allianz alongside Burger & Lobster include leisure company Open House, whose London venues include The Lighterman in King’s Cross and The Broadcaster in White City.
![The Lighterman in King’s Cross](https://www.businessfast.co.uk/wp-content/uploads/2024/05/1715621030_90_Insurance-battles-over-UK-Covid-lockdowns-rage-on-in-courts.jpg)
Co-founder Ankur Wishart contrasted the approach of the insurer with “strong support” shown by landlords and banks. Insurers were “arguing over the definition of a word” when “common sense says it [the policy] should respond”, he said.
Legal wrangling over insurance was just one of many recent frustrations for the hospitality industry alongside electricity prices, transport sector strikes and Brexit, he said.
“For us, at least we’re recovering. We see the lights at the end of the tunnel,” Wishart added. A court victory “would be great, but we’re not really relying on it”.
Others have not been so fortunate. Policyholder lawyers said several clients had become insolvent waiting for claims to be paid.
“Quite a few of them have gone under over the last three or four years partly because they didn’t get their insurance money,” Leedham said. Survivors were “damned if they’re going to let insurers get away with it”, he added.